The IPO Buzz: An IPO with Wings

The IPO calendar in the second week of June takes flight with Wingstop (WING – proposed), a restaurant franchisor and operator known for its way with chicken wings. The deal is on the “most wanted” lists of many IPO professionals.

This year could go down in IPO history as the year of the fast-casual restaurant chains. Shake Shack (SHAK) is the best-performing IPO of 2015 – UP a mouth-watering 266.67 percent as of Friday’s close. The stock, priced on Jan. 29 at $21, closed on June 5 at $77. The stock jumped in late May on news that Shake Shack, known for its burgers, had applied to trademark the name “Chicken Shack.”

Wall Street is definitely in the mood for chicken, it seems.

 Wingstop, based in Dallas, is a franchisor and operator of restaurants that specialize in cooked-to-order, hand-sauced and tossed chicken wings. Wingstop offers “11 bold, distinctive and craveable flavors on our bone-in and boneless chicken wings paired with hand-cut, seasoned fries and sides made fresh daily,” its prospectus says. Wingstop received numerous accolades, including recognition in 2014 as the “Best Chicken Wings” in the United States by Food&Wine, the “#3 Fastest-Growing Chain” by Nation’s Restaurant News and the “Best Franchise Deal in North America” by QSR Magazine. Founded in 1994, Wingstop reported net profit of $8.6 million on revenues of $69.8 million for the 12 months ended March 31, 2015.

Bankers are expected to price 5.8 million shares at $12 to $14 each on Thursday evening to trade on The Nasdaq Global Select Market on Friday morning.

(For more information, please click here: Wingstop)

It takes more than one appetizing deal, of course, to make up a robust IPO market. The numbers for the month of June tell the story.

June’s Startling Stats

Even though June is one of the shorter months – one of four with only 30 days – its IPO calendar is one of the year’s most productive. This June could be on track to uphold this tradition.

Over the last 45 years going back to 1970, June’s calendar has generated 1,366 IPOs out of 13,549 deals priced during that time, according to the U.S. Securities and Exchange Commission filings. So an “average” June works out to be 10.08 percent of the annual traffic. That is 21 percent above an “average” month, which is 8.33 percent.

Let’s take a look back to the recent past:

  • May 2015’s calendar generated 22 IPOs, making it the busiest month of the year so far.
  • June’s first week priced four IPOs.

Fast forward to the present: There are five or seven deals on tap for this week, depending upon your definition of an “IPO.”

A peek at the future: There are three more deals for the week of June 15. That brings June’s total to at least 12 IPOs so far, and the hands of the clock have moved forward for just one week.

A BioPharma from Bermuda

This week’s IPO calendar lists anywhere from five to seven offerings, depending upon what some call an “IPO.” Wingstop and one other company – a biopharmaceutical company from Bermuda – are on the “most wanted” lists of the market’s most stalwart players. Two deals are transplants from other stock exchanges.

Axovant Sciences Ltd. (AXON – proposed), based in Bermuda, is a clinical-stage biopharmaceutical company focused on development of novel therapeutics to treat neurodegenerative disorders. Its near-term focus is to develop its product candidate for the treatment of Alzheimer’s disease and other forms of dementia. The company refers to it as RVT-101. Axovant acquired worldwide rights to RVT-101 from Glaxo Group and GlaxoSmithKline Intellectual Property Development in December 2014. The company plans to commence a Phase 3 pivotal program of RVT-101 for the treatment of mild to moderate Alzheimer’s disease in the fourth quarter of 2015.

Note: Entities affiliated with Visium Asset Management and RA Capital Management have indicated an interest in purchasing up to about $150 million of common shares, or 60 percent of the deal, in this offering.

Bankers are expected to price 17.9 million shares of Axovant at $13 to $15 each on Wednesday evening to trade on the New York Stock Exchange on Thursday morning.

(For more information, please click here: Axovant Sciences Ltd.)

Are They? Or Aren’t They?

Back in the “Mad Men” era, only a woman’s hairdresser knew for sure whether her hair color was her own or not.

This week, two deals coming to market are transplants from other stock exchanges. Some people define these deals as IPOs. Others do not.

Biotie Therapies (BITI – proposed), based in Turku, Finland, is a biopharmaceutical company focused on developing therapeutics for central nervous system disorders. Its pipeline includes product candidates designed to address unmet medical needs in treating Parkinson’s disease and related dementia, other neurodegenerative indications and primary sclerosing cholangitis, an orphan fibrotic liver disease.

Note: From the prospectus, “Our shares are listed on the NASDAQ OMX Helsinki Ltd., or the Finnish Stock Exchange, under the symbol “BTH1V.” The shares have been trading since October 31, 2002.”  You can load up on stock before the deal is priced to trade in the U.S. capital markets.

(For more information, please click here: Biotie Therapies)

Principal Solar (PSWW), based in Dallas, plans to acquire, build, own, and operate profitable large-scale solar generation facilities, while also creating a website that is a focal point for solar vendors and buyers, and to create an innovative solar company.

Note: From its prospectus, “Our $0.01 par value common stock (“Common Stock”) is currently quoted on the OTC Pink® market maintained by OTC Markets Group, Inc. under the symbol “PSWW”. The last reported trading price of our shares on May 15, 2015, was $12.00 (based upon a 1:4 reverse stock split effected May 6, 2015, pending with FINRA, and described elsewhere herein). In conjunction with this offering, we applied to list our Common Stock on the Nasdaq Capital Market under the symbol “PSWW”.”)”

(For more information, please click here: Principal Solar)

Looking into the week of June 15, the IPO calendar has three deals. But there’s no need to worry. The calendar has been known to fill up quickly on Monday mornings.

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.